Applications to university will fall as fees rise, minister admits

University applications are likely to fall for the first time in eight years after the introduction of increased tuition fees, the government admitted last night.

Speaking ahead of next week's deadline for applications, the higher education minister, Bill Rammell, estimated that the number applying to start university in the autumn would be down by about 2%.

Ministers have repeatedly argued that the £3,000 fee would not put students off and yesterday Mr Rammell insisted a 2% fall represented a "strong performance", given the surge in applications last year.

"This was to be expected, given the very large increase last year of something like 9%," he said. "I am not anticipating a change from that. I most certainly do not believe that we are going to see a major downturn in applications." Many students would be better off under the new system, with more generous grants and bursaries, he said.

But the National Union of Students said ministers had to admit that tuition fees were a deterrent. Julian Nicholds, NUS vice president, education, said: "Education must not become a commodity reserved for those who can afford it. However, that is exactly what will happen if the government won't admit the deterrent effect of top-up fees. We are extremely worried. So should the government be."

Last week careers advisers warned that there would be a drop in applicants from less well off backgrounds after the introduction of higher tuition fees and a survey of further education colleges by the Guardian found growing concern among students about the impact of the new financial arrangements, which tutors said most applicants do not understand.

But Mr Rammell insisted the downturn in applications would be short-lived: "When tuition fees first came in 1998, there was something like a 2.5% reduction in the first year - a marginal decrease - and then the trend continued upwards.

"I'm not into the prediction business but I think it may well be the case that you will see a similar kind of pattern. But thus far a 2% reduction on the back of a 9% increase is not anything other than a strong performance in terms of applications."

Ministers want 50% of those aged 18-30 to go to university by 2010. From this autumn, the vast majority of universities will charge fees of £3,000 a year, more than double the current rate. But unlike now, students will repay their fees only after they start work, and more generous grants will be available. Mr Rammell said: "When you properly explain that to students they are reassured. We have got to ensure that everybody understands the new system." But Mr Nicholds insisted any fall in applications would prove tuition fees were a significant deterrent. "The prospect of top-up fees for courses beginning next autumn will further harm the government's stated aim of widening participation to meet their target of 50%."